Electronic signatures can be used to execute documents as long as usual rules are met: Law Commission

Electronic signatures can be used to execute documents, including where there is a statutory requirement for a signature, the Law Commission has said.

The Government’s law reform advisory body said this meant that, “in most cases”, electronic signatures can be used as a viable alternative to handwritten ones.

The Law Commission’s position is set out in a report containing its conclusions as to the law regarding the validity of electronic signatures.

It said it hoped that its statement of the law would end uncertainty and increase confidence in the use of technology.

Stephen Lewis, Commercial and Common Law Commissioner, said: “Electronic signatures can offer quicker and easier transactions for businesses and consumers.

“Our report aims to provide an accessible statement of the law which makes it clear that an electronic signature can generally be used in place of a handwritten signature as long as the usual rules on signatures are met.”

The Law Commission said that an electronic signature is capable in law of being used to execute a document (including a deed), provided that the signatory intends to authenticate the document and that any relevant formalities, such as the signature being witnessed, are satisfied.

“The Commission’s view is based upon legislation and court decisions which relate to both non-electronic and electronic signatures,” it added.

“The common law in England and Wales has always been flexible in recognising a range of types of signature, including signing with an ‘X’, initials only, a printed name, or even a description of the signatory such as “Your loving mother”.  The courts have considered electronic signatures on a number of occasions and have accepted electronic forms of signatures including a name typed at the bottom of an email or clicking an “I accept” tick box on a website.

“These court decisions supplement the EU eIDAS regulation, which states that an electronic signature cannot be denied legal validity simply because it is electronic.”

The Law Commission identified some practical considerations which could impact upon the decision to execute documents electronically, including:

• Concerns that electronic signatures are more susceptible to fraud than handwritten signatures, which could put vulnerable people at risk.
• Practical issues such as the reliability and security of e-signature technology and the cross-border nature of some transactions which can affect whether parties opt to use electronic or handwritten signatures.
• Whether deeds can be witnessed remotely via video witnessing. “Where a signature has to be witnessed, the Commission’s view is that the current law probably does not allow for “remote” witnessing such as by video link.”

The Law Commission report makes recommendations to address some of the practicalities of electronic execution and the rules for executing deeds. The recommendations include:

• The creation of an industry working group ­­– “to consider practical and technical issues around electronic signatures and provide best practice guidance for their use in different types of transactions”.
• Video witnessing for deeds – “the industry working group should look at solutions to the practical and technical obstacles that exist to video witnessing. Following this work, Government should consider legislative reform to allow for this.”
• A future review of the law of deeds – “to consider broad issues about the effectiveness of deeds and whether the concept remains fit for purpose and specific issues which have been raised by stakeholders. The review should include deeds executed on paper and electronically.”

The law reform body also sets out an option for reform that Government may wish to consider, namely codifying the law on electronic signatures in order to improve the accessibility of the law.